Institutional investors, their differences

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Investors buy and sell securities. By investing their money in shares, they (with an increase in their value) sell such securities at a higher price, which brings investors a tangible income. Acquired securities in accordance with the legislation of the Russian Federation are their property. Investors can be:

• joint stock companies;
• individuals;
• collective investors;
• state.

There are investment companies that, by issuing their securities, attract funds from individuals and legal entities.

In the Russian stock market, collective investment is increasing, it is growing along with the improvement of such a market. Mutual funds collect money from small buyers and pool them together. Further, they acquire blocks of shares and sell them at a rise in price, thereby increasing the income of investors. These are the so-called mutual funds.

According to the characteristics of investors can be classified:

- institutional investors. They are the largest in the financial market, they are the main participants in the circulation of "long money".

-largestate funds "Sovereign". They manage essentially public money. Many of them have huge assets. These are Norwegian Fund-Global, SAMA, SAFE, Temasek, etc.

-mutual funds are managed by investment companies;

- insurance. Invest money in securities from insurance premiums received as profits from insured clients;

- banks usually sell their free money on the financial market by buying bonds and other liquid securities;

- pension, where pension contributions of citizens are invested.

These are all institutional investors.

Investors in the securities market are their owners by right of ownership.

Working in the stock market, such an investor can choose either aggressive or conservative tactics.

Strategic investors can be called those who form a certain portfolio of stocks for the long term. For the most part, they seek to acquire a controlling stake in one or more enterprises.

Speculative, which operate on a short-term basis. They sell shares over a short period of time, extracting profit from this in the shortest possible time.

Professionally engaged in securities trading are persons with impressive capital. Institutional investors have access to capital, which is why they are professional players in the stock market.

Qualifiedinvestors are a special type of professionals with experience in the securities market and knowledge in this area. They have significant capital. All kinds of risks are professionally assessed. They invest their assets in rather risky enterprises. They prefer shares of mutual funds, hedge funds, credit, private equity funds, venture capital. All of the above are quite risky and inherently unreliable.

Institutional investors prefer minimal risk in their investments, counting their work on a long-term basis.

Studies have shown that financial services have become the most attractive for citizens. They were preferred by 51% percent of investors. 35% preferred retail, 14% preferred manufacturing.